The Shakedown 7/21/19

Pullback Looming?

While the market did a great job pivoting at old resistance Thursday, giving us some great two day trading, and ugly close Friday could mean we're due for a pullback early this week. The last two hours of the day were very telling Friday as we saw a ton of selling, signaling weary traders not willing to hold risk over the weekend. The ugly reversal Friday has me cautious heading into this week. It should be noted there was relative strength in the Material and Industrial Good names. The news to look out for Monday is White House Economic Advisor Larry Kudlow is hosting a meeting with software/semiconductor executives concerning the Huawei technology ban.

The next Fed Meeting to which the market has priced in at least a .25 basis point rate cut is a week from this Wednesday.

We have earnings bonanza this week with 557 companies reporting including a ton of heavy hitters. Some names reporting include: AMZN, GOOGL, FB, TWTR,  TSLA, PYPL, INTC,  BIIB, JBLU, SNAP, V, IRBT, CMG, ANTM, CAT, UPS, MMM,  ABBV, ALXN, DFS and many many more.

With that many companies reporting it's sure to be a busy week. A massive weekend chart scan proved a ton of sloppy looking setups with earnings around the corner --- telling us we should avoid the "B" setups and wait for the best earnings names to prove themselves. Won't be a ton of setups I'm looking to get into Monday as I'm planning on doing just that - waiting on earnings season to show us who will be the next market leaders. 

KSU Long

KSU has been trying to break this 124-126 area resistance level since Obama was in his first term. Transportation and railroad stocks especially have shown strength when we've seen so much underlying weakness out there. After Friday's earnings release, Kansas City Southern finally appears ready to take out that resistance with a strong reaction of buying. In an ideal world, this stock hangs around the resistance level and gives us a flag on the daily chart for a tight entry. If this goes Monday, the only spot to really place your stop would be below $120 which is more than I'd like to risk in this name, so I'll be watching closely for better entries. The weekly chart resistance level is just too massive to not highlight this one.

Trigger: $124

Stop: $119.89 unless a tighter entry emerges

Target: $140+

Hope to see you in the chat Monday!
Busy week with 550 companies reporting so be ready!
Weekly Watchlist coming in the following email.

Leave a comment